Zoning is almost always the issue.

In terms of BRRRR, Twin Cities is a red hot market & exceedingly difficult to find a BRRRR deal, & I'd say even more so on the MLS.

(If they don't have them maybe a red flag?)  

My math shows this running about $175/month in the red.

While not my first major remodel project, it is my first time trying to do it with zoning changes.3.

In most of Houston, there is no zoning, so if I get a nice land and can easily put two or three offices for half a price of a single structure and rent them at half the cost of a regular small office, or buy a knock down house, level it and put up converted containers on it, possibly even add self storage components. 

If you go to your town/city assessors website, they should have a zoning map.

The home inspection does not highlight this as red or critical which is surprising to me.

Oh that's the notorious "do not invest zone" - sorry this happened to you!

If you buy or control the property with the right terms & the area zoning allows that use you can make it profitable.